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To enable the VS password encryption, go to your Control Panel's Settings menu and click the Configuration icon. In the System tab, move the Allow VS password encryption slider to the right to enable root password encryption for virtual servers.
To encrypt the root password for your VS instance, move the Encrypt Password slider to the right and enter your encryption passphrase at the Properties step in the VS creation wizard.
The Triple Data Encryption Algorithm (DES-EDE3-CBC) with the salt option is used to encrypt the root password for VS. The salt is randomly generated for each password as an additional input since without the salt the same password always generates the same encryption key.
In the OnApp database, the root password is stored in the hashed form as BASE64 in the virtual_machines table. When you attempt to access a VS, the password you enter is checked against the password that is retrieved from the database.
The encryption passphrase that you provide for a password is not stored in the OnApp database due to security concerns.